Aaron Is a Self-Employed Practical Nurse Who Works Out of His

question 178

Multiple Choice

Aaron is a self-employed practical nurse who works out of his home. He provides nursing care for disabled persons living in their residences. During the day he drives his car as follows.
$\begin{array}{lr}&\text { Miles }\\\text { Aaron's home to patient Louise } & 12 \\\text { Patient Louise to patient Carl } & 4 \\\text { Patient Carl to patient Betty } & 6 \\\text { Patient Betty to Aaron's home } & 10\end{array}$

Aaron's deductible mileage for each workday is:

• A) 10 miles.
• B) 12 miles.
• C) 20 miles.
• D) 22 miles.
• E) 32 miles.

Prepare a cost of goods sold section of the income statement under periodic inventory system.

Calculate gross profit and prepare related sections of the income statement.

Develop skills in journalizing adjusting entries for inventory shrinkage under perpetual inventory system.

Interpret and journalize transactions involving sales taxes, credit terms, and payment discounts.

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Definitions:

Merchandising Transactions

Business activities related to the buying and selling of merchandise, which may involve inventory purchases, sales transactions, and the return of goods.

Journal Entries

Journal entries are the records of financial transactions in the accounting books, marking the initial step in the accounting cycle, detailing debits and credits.

Adjusted Trial Balance

An adjusted trial balance is a listing of all company accounts that will appear on the financial statements after year-end adjusting journal entries have been made.

Closing Entries

Journal entries made at the end of an accounting period to transfer balances from temporary accounts to permanent accounts, finalizing the books for the period.